NEW YORK (Reuters) - UBS Wealth Americas, the U.S.-based brokerage arm of UBS AG, is letting go about 75 sales assistants, a spokeswoman at the firm said Tuesday.
The assistants, known as client service associates, handle customer inquiries and prepare paperwork for the firm’s approximately 7,000 financial advisers, and are considered fundamental to helping brokers’ productivity. Some are paid directly by advisers while others get most of their pay from the firm.
The layoffs began about a week ago and are ongoing, said the spokeswoman, Karina Byrne. A small number involve employees who are retiring and are not being replaced. The layoffs affect a small number of the firm’s approximately 3,000 service associates nationwide, but “are part of our ongoing review of costs and resources,” she said.
Expenses at UBS Wealth Americas, an outgrowth of the firm formerly known as PaineWebber, jumped 8 percent to $1.7 billion on legal, compensation and recruiting costs last quarter, while results at its parent bank also were marred by regulatory issues.
UBS, like other large Swiss banks, has been cutting certain trading operations and taking the ax to peripheral areas as it scrambles to meet new bank capital requirements and deal with the demise of Switzerland as a tax haven for the very wealthy.
UBS Wealth Management Americas Chief Executive Bob McCann has guided the broker-dealer back to profitability since he took over in 2009 by cutting the brokerage force almost 40 percent from its pre-financial crisis levels while recruiting top brokers from rival firms. He also has focused advisers on soliciting ultra-wealthy clients and steering them to sales of mortgages, insurance and loans to supplement standard investment products.
In May, McCann reorganized his management team - most of whom had worked with him when he ran Merrill Lynch’s retail brokerage business - and said in a memo that his top aide will be further “realigning the field leadership structure to create greater accountability.”
The layoffs follow a quarter in which the brokerage’s pretax operating profit fell 3 percent as compensation and recruiting costs were up 8 percent each. UBS Wealth Americas had $2.99 billion of “forgivable” recruitment loans to brokers on its books as of June 30.
Reporting By Jed Horowitz; Editing by Jonathan Oatis